Q3 2021 Similarweb Ltd Earnings Call
[music].
Yes.
Good day, ladies and gentlemen, and welcome to the similar web Q3 fiscal 2021 earnings conference call. All lines have been placed on a listen only mode and the floor will be opened for questions and comments following the presentation.
If you should require assistance throughout the conference. Please press star zero on your telephone keypad reach a live operator.
This time it is my pleasure to turn the floor over to your whole any rosenberg ma'am the floor is yours.
Thank you operator during this call we will make forward looking statements related to our business, including statements related to the expected performance of our business future financial results strategy and potential impact of the COVID-19, pandemic and associated global economic uncertainty.
Long term growth and overall future prospects.
These statements are subject to known and unknown risks uncertainties and assumptions that could cause actual results to differ materially from those projected or implied during the call.
Actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward looking statements and reported results should not be considered as an indication of future performance.
Please review our filings with the SEC, including our final perspective in section entitled Risk factors therein filed with the SEC on May 12, 2021 for a discussion of the factors that could cause our results to differ.
Also note.
The forward looking statements on this call are based on information available as of today's date, we disclaim any obligation to update any forward looking statements, except as required by law.
As a reminder, certain financial measures we use in this presentation and on our call today are expressed on a non-GAAP basis. We use these non-GAAP financial measures internally to facilitate analysis of our.
Our financial and business trends and for internal planning and forecasting purposes. We believe these non-GAAP financial measures when taken collectively may be helpful to investors, because they provide consistency and comparability with past financial performance by excluding certain items that may not be indicative of our business results of <unk>.
Operations or outlook.
However, non-GAAP financial measures have limitations as an analytical tool and are presented for supplemental informational purposes only.
They should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP.
A reconciliation between these GAAP and non-GAAP financial measures is included in our earnings press release, which can be found on our Investor Relations website at IR Dot similar web dot com.
With that I will turn the call over to <unk> CEO of similar web.
Thank you Amy and thank you all for joining us today for our Q3 2021 earnings call. It's great to be here with all of you. This morning.
Our team is executing at a very high level and we delivered very strong results for the quarter. As a result, we're pleased to raise our revenue guidance for the full year of 2021 grew $135 million, representing a 45% growth year over year.
Q3 was a strong quarter in which we achieved a number of new milestones first and foremost I'm proud and excited to report that in Q3, we still exceeded $150 million just one year. After we reached the $100 million.
Back in Q3 2020.
Also in the quarter, our GAAP revenue increased 46% year over year to $35 $6 million. This result exceeded our guidance.
Q3 was a record quarter for us for both new customer acquisition and retention our customer base grew by 174 accounts, including the addition of amazing new logos across a diversity of industries, including Volkswagen Group Toshiba Electronics, The London School of economics.
Royal Caribbean.
Chris the agnostic and news Corp, Australia.
Our most significant growth come in our largest and most strategic customer segments those companies to generate more than $100000 in AML.
Q3, we set a new record, adding 25. Additionally, the $100000 customers an increase of 48% year over year. This critical segment now represents over 50% of our total level for the first time.
We're seeing strong momentum as our expanding product portfolio is contributing to greater velocity in our land and expand direct sales motion in.
In Q3, we set a new record for MLR, improving from the previous high of 106% and at the end of Q2 to 110% in Q3 in this critical customer segment of accounts with over 100, K Haler will improve the MLR fell to 122.
Percent.
Up from 118% in Q2 also a new record high.
Those improvements are driven by expanding usage of our products as well as by our customer.
Smaller than one of our digital intelligence solutions as you know we offer a complete suite of digital intelligence solution supporting a wide variety of use case for digital marketing sales market research Chicago strategy and alternative data for Invesco.
So there are more than two thirds of all of our customers purchasing more than one solution.
And then example of all of.
Our portfolio strategy is helping to drive deeper customer penetration.
In Q3, we completed one of the largest biggs and similar with history.
Combination of upsell and cross sell with a major multinational Internet technology company.
Was a seven figure addition to our existing relationship making this the second consecutive quarter, we have been able to announce an <unk> contract of this size.
This customer will be using four of our five digital intelligence solution, representing a total of $6 $5 million.
Contract.
I wanted to focus for a minute on one of our five solution or a new shopper intelligence offering it is exciting and deflation solution and we're seeing some amazing early success with it.
<unk> intelligence to deliver powerful insights into the promo activity online marketplaces, enabling our customers to optimize the performance by the drilling browsing and buying behaviors across online marketplaces.
Insights help them to shape, the online sales strategies by optimizing product portfolio.
Looking at the competition and improving search and advertising performance.
When we launch our digital marketing and digital research solution. It took us four years to get to our first seven figure deal with sharper intelligence. It took us just three months.
And in Q3, we signed our first seven figure there are data for the shopper intelligence.
And here are a few examples of how our customers shop and intelligence.
A large north American retailer reported the chopper intelligence help them remain the product to better align with celgene behavior, resulting in 20% increase in sales and.
Q3, we completed a two year deal of $600000 with discussing them.
Also in Q3 shop intelligence help us win with a consolidated specialize in CPG the deal expand our business with this customer by six six to $360000 of ammo contract.
This customer will use similar wind in our sales forces to target and reach new customers as well as.
<unk> advises a CPG customers to optimize their partnership with big box retailer.
The customer has also agreed to be at the federal partner for Us and it is not recommending similar web.
Direct customers.
One off solution that is growing nicely is our sales intelligence solution.
B to B companies.
Turn to digital players that incremental digital publishing and digital advertiser.
And for example post group is a leading SMS platform that enables ecommerce to communicate and engage with customers for text messages marketing.
Postscript needed to improve and automate its account targeting and lead generation, which was labor and time intensive by implementing similar web sales intelligence solution. The company now has access to similar web E. Commerce based in every region mathematically can segment and prioritize the comment was made in integrating them directly into salesforce.
The result was an increase in target account pipeline of 27% within just the first two months.
In Q3, we continue to make smart product investment to enhance our solution portfolio and make it stickier you over here, we've doubled the size of our engineering team and in Q3, we delivered hundreds of improvement the Costco portfolio digital intelligence solution that includes major functional advancement.
In our competitive inside PR strategy and advertising intelligence feature and to name a few.
These improvements are driving more customer value and increasing our product stickiness with reflecting in our consistently improving on a wrong number.
It also reflect in the way our customer use our solution incorporating them directly into their business workflows.
Indirect channels the sales partners affiliate resellers, an OEM of a new area of expansion for our business for.
For example in September we announced that we had been selected by Google to power its new market find themselves.
Market fundamentals help small and medium sized businesses targets and grow into new global markets.
This leverage even though web data to analyze our company export potential delivering automated skull along with both of them is an action button commendation to kick start.
And then international expansion plan, Google has told US that it was the accuracy of our digital data and insights in our data edge.
<unk> go decision to integrate with them.
We need to go get and reflects our growing relationship and also representative of the increased potential we seek to build the OEM relationship with partners include our data and insights in their own product offering.
Also saw channel growth outside of OEM. In fact, Q3 was the first quarter in which our instead of outside of Japan contribute more than $1 million.
New business.
Overall, we have a strong opportunity for our indirect business and we plan to increase our investment in this area.
Our data and insights are recognized by our customers and companies like Google and postscript.
The effort today as well as by the industry and more broadly in fact last month, we were recognized by the hedge week as the best alternative that would provide them in the 2021 because of the award.
So over 10 years, we have been working on solving the incredibly challenging problems of measuring digital behavior, we invest significant resource.
That's an acquisition and we will then amazing RMB team is top notch Zucker scientists engineers those investments in technology are very difficult to replicate.
We are proud of and confidence in our Doctor adds and we are and we have a depreciated ourself on.
Real ability and comprehensive of our Delta.
But we are always looking to innovate and improve on our measurement and insights creation.
That's why today as you may have seen we announced the acquisition of <unk> mobile a Samsung Cisco based mobile insight provided the market leader in mobile audience analytics consumer panels and mobile sampling, we will pause now of NV full over the years. So we know them very well and we have been very impressed.
With the quality and depth of the Doctor.
And the measurement approach is backed by a large scale metal panel of highly engaged optic zone.
This approach complements our existing measurement strategies and will enable us to enhance our mobile intelligence offer them with more granular data and more powerful use case.
Beyond this.
We believe that <unk> will position us to introduce exciting new market research capabilities in the future we will.
Welcome to MVP into the similar family and we're looking forward to working together with them to advance the stage of the eye.
In the digital measurement.
In general we continue to benefit from the strong secular trend forward the digitization.
That's.
Digital has become a preferred way to interact transact and deliver products and services. It is an important global glove with us either in strategic focus for most businesses today.
It'll markets are highly competitive in almost every player is looking for advantage our digital intelligence solutions give our customers an edge data and insight that enables them to understand the market better than their competitors take action faster and win.
The more the companies shift their business and become depend on digital the.
The more mission critical offering become those trends are driving our strong growth and enforcing our confidence in our opportunity for LNG and.
The investment, we're making in our future.
We have a massive market opportunity, which we believe today is approximately $34 billion of solutions target. The most essential revenue driven operation of our customers.
Sales and marketing ecommerce and C suites, and we sell across a wide variety of industries, ranging from financial services retail travel CPG media and many more to.
To summarize we continue to execute successfully on our staff at <unk> since our IPO, we reach the $160 million milestone nearly three months ahead of us.
Our plan and we have delivered two consistent quarter of strong revenue growth both north of 45%.
We have grown our indirect channels and we expand our doctor edge, both organically and through acquisition in Q2, and Q3, we introduced new products and features that expand outcome and proven our ability to monetize those with significant run up some deals.
Our combination of strong revenue growth and outstanding gross margin put us and longest small group of best in class SaaS companies in the World and we are very proud of these achievements.
Finally, our execution in growth would not be possible without every member of our global team.
Each of whom worked hard to achieve those results within the top class recruiting machine and drive and support our growth. We are currently signing new hires at a rate of 50, new employees per months.
I'm very happy that this.
This week Dnb recognized us as one of the top 30 tech companies to work in England.
Overall I'm pleased with the way our team continued to execute and are focused on helping our customers succeed in women's digital world.
Heading into Q4 with tremendous amount of energy and momentum as you can see by our raising our guidance and as I like to say we are just getting started.
With that I will turn it over to Jason our CFO to review the financial Jason.
Thanks Art and good morning, everyone I will now walk you through our third quarter financial results before moving on to our guidance for the fourth quarter and full year 2021.
As already mentioned in Q3, we delivered record revenue of $35 $6 million, reflecting 46% year over year growth.
This increase was driven both by an increase in our total number of customers, which rose by 27% to 3242 as well as an increase of 16% and our average annual revenue per customer to $45000.
In our large customer segment, those who generate a $100000 or more in <unk>, we increased the number of customers by 48% year over year to 245 customers. Once again most of these customers began initially as smaller customers and have expanded through our successful land and expand motion.
Today this customer segment represents 51% of our ALR, while no single customer accounts for more than 5% of our IRR or revenue.
Dollar based net retention rate or <unk> was 110% overall and 122% for our $100000 AOR customer segment as compared to 101% and 114% respectively last year.
The success of our land and expand model continues to prove itself.
<unk> not only improves substantially year over year, but also sequentially as compared to Q2.
As you know substantially all of our revenue was AOR annual recurring revenue with minimum subscription terms of one year. We continued to increase the number of customers with multiyear subscription terms as of the end of Q3, 31% of our IRR is generated from customers.
With multiyear subscription commitments compared to just 25% last year.
This trend along with our high NRI.
Reaffirms the value that our customers are generating from similar web and gives us visibility into the health of our RMR.
In discussing the remainder of the income statement. Please note that unless otherwise stated all references to our expenses and operating results are on a non-GAAP basis and are reconciled to the GAAP results in the earnings press release that was issued just before this call.
Our gross profit totaled $27 $9 million in the quarter, representing a gross margin of 78, 3% versus 78% in Q3 2020.
Operating expenses grew to $41 7 million in Q3 up from $21 4 million in Q3, 2020, largely reflecting the investment in personnel across the business from product in R&D sales and marketing and our G&A.
To support our business growth.
<unk> head count increased 69% to 864 employees as compared to 511 last year, which has fueled our topline growth.
The specific components of our operating expenses were research and development $10 4 million versus $5 $3 million. In Q3 2020. This increase was driven primarily by growth of employee head count who are focused on our newer solutions such as shopper intelligence.
Intelligence and Investor Intelligence, we're already realizing revenue growth from these new solutions and believe that these investments will prove to be meaningful growth drivers in the future.
Sales and marketing $23 2 million versus $12 9 million in Q3, 2020, driven principally by increased investment in sales and account management head count and marketing activities.
General and administrative was $8 1 million versus $3 2 million in Q3, 2020, which includes $1 $2 million of additional cost for the quarter that we now incur as a publicly traded company.
As a result, our non-GAAP operating loss in the quarter totaled $13 $9 million better than our guidance increasing from $2 $4 million in Q3 2020.
Free cash flow for the quarter was negative $17 $1 million compared to negative $2 3 million in Q3 2020, primarily as a result of the investment and employee hiring to drive our growth.
These investments are already showing their value in the acceleration of IRR customer growth and higher NRI.
Turning to the balance sheet, we ended Q3 with $159 $1 million of cash and cash equivalents and no debt.
We believe that our cash balance.
Our $75 million credit facility totaling $234 million of available funds provide us with more than enough liquidity to execute on our growth plans.
Deferred revenue at the end of the quarter was $66 4 million compared to $43 6 million at the end of Q3 2020, our remaining performance obligations or <unk> totaled $114 $1 million up from $85 7 million as of December 31, 2020.
We expect to recognize approximately 87% of total RPM as revenue over the next 12 months, we believe that the combination of deferred revenue and RPI are a good indicator of the health of our business.
During Q3, we exceeded $150 million of ALR continued to deliver strong and accelerating <unk> and customer growth, both overall and from our $100000 ALR customers. These trends and the continued momentum and demand in our business fuels our confidence.
To again raise revenue guidance for the year.
For Q4 2021, we expect total revenue in the range of $37 5 million to $37 $9 million for.
For the full year, we are raising guidance and expect total revenue in the range of $135 million to $135 $4 million.
Representing 45% growth year over year at the midpoint of the range as compared to 32% growth last year.
Non-GAAP operating loss for the fourth quarter is expected to be in the range of $18 8 million to $19 2 million and for the full year between $52 1 million and $52 5 million.
This includes approximately $3 million of incremental operating costs related to the acquisition of MB mobile, which we expect to close this month.
In summary, we executed well since our IPO, our business is tracking well across all of our major initiatives and our financial performance and guidance indicates that we will end the year on a high note and head into 2022 with strong momentum.
With that or and I are happy to take your questions operator.
Thank you. The floor is now opened for questions. If you do have a question. Please press star one on your telephone keypad at this time.
Anytime Youre question has Cameron.
Can't remove yourself from the queue by pressing one again, ladies and gentlemen, if you do have a question. Please press star one on your telephone keypad at this time.
Yeah.
Our first question comes from the voluntary please state your question.
Thank you and congratulations.
It was a great quarter.
Certainly the net dollar retention rate just.
Phenomenal I guess, let's focus on that acceleration youre seeing with NR NR hitting high watermarks I guess.
Both or Jason I'd love to understand what drove the customer expansion is it are you seeing close my budgets expand.
Is it a operational go to market change to highlight.
Was it the new product that is being adopted as those products get rolled out help me understand sort of what drove that acceleration in the quarter that we've seen now for a couple of quarters.
Okay.
So I. Thank you all.
I think.
Theres many element to contribute to the growth of them are we seeing although the first quarter of I I can assume that majority.
We already have the impacts come from improvements that were doing them the product plans.
Producing new products to the customers and then driving upsell and cross sell.
And the customer is buying more of our product portfolio offering.
Gotcha, Gotcha, Gotcha, and then or maybe maybe a little more technical one here. So you mentioned that MB collect data through panels can you can you talk a little bit just in more depth about the types of data that can be collected by solution and then how does that data fit in with your existing data modeling process.
Yeah. So Andy is really expert in the litho dependent in the world and for the mobile and there is a green dot assets.
So there is.
He is a great enrichment for two.
First improving the mobile web to improve destination on the web site with vessel.
In a moment estimation and then the second part is improving our offering.
So they also have the great inflammation.
Inflammation.
Download and usage.
That ecosystem.
And then we also have very deep technology that can seem over like Ed exposure and.
Cetera around mobile ecosystem that is something that is very unique.
Gotcha. That's helpful. Thanks, guys congrats on a really nice job there.
Thank you.
Our next question comes from Sterling Auty. Please state your question.
Yeah. Thanks, Hi, guys. So I'm wondering in terms of the increased usage part of the NR, specifically what programs or things are you doing differently now than maybe a year ago to help motivate that increased usage into your customer.
<unk>.
And I don't think we did anything special.
Yeah.
I will go to market I think it was mostly natural it was not like.
And you've seen aggressive campaigns on our side of thing just more improvement on our product tomorrow listening to our customers what they need to do the right improvements in the product and then introducing new exciting features and solutions is what is rising.
Then this growth.
And then if it's kind of just organic adoption on your customers or are you finding that the increased usages is spreading across different types of departments within those customers.
Hitting different budgets and maybe just.
Our marketing budget.
Land initially.
Tim.
I think the answer is yes, yes, when we when usually when we introduce new solution is basically in your department.
We think the CPG as example.
Usually land on our leasehold solution that comes sometimes from the that the teams and budget or the marketing budget and when we come and introduced a new shorter intelligence solution, we would be talking with different teams like the commerce theme product is buying teams. So so different budgets using.
Understood. Thank you.
Okay.
Our next question comes from Brent Thill. Please state your question.
Hi, guys. This is David on for Brian Thanks for taking the question.
I guess the first one if you could maybe discuss the MB acquisition.
How it's going to position you guys in the mobile area and the App data spa area, especially against competition.
So I think it's a great boost to all our entire mobile.
That infrastructure and we feel highly confident we work with <unk> for more than a year of the pulp mills. So we were very soon.
The offering and that the quality and we were highly impressed.
We feel that and not only by joining forces with them, we can introduce and much better.
And mobile data quality. We can also believe that we can accelerate their business and in the operation.
There were a small startup $6 17 to employees, who are doing good job, but with the similar web at least those that infrastructure behind them. We can I think we can really scale in the operation and basically most of them.
And the technology endometrial panel and this one.
Similar web says really strong.
And also in bundled.
Got it I am looking forward to you guys integrating that into the platform and then being able to use it and then.
Maybe just one more on head count I think you guys had head count was up 69% year over year could you touch on what areas of the business we're seeing.
The majority of the head count growth and maybe going forward.
Where are you where are you guys focusing on hiring.
I think all over is the company seeing a great growth. So the growth in the past it was in all departments from our G&A to be ready for the IPO and the public company to to double our R&D organization and the first deal to support all the success, we're seeing with our new solutions and the <unk>.
Of course, our go to market that continue to execute amazingly well.
We need to hire more people to.
The growth we were looking for.
Great. Thanks, guys.
Okay. Our next question comes from Jason <unk>.
Healthy please state your question.
Hey, Thanks, Hey, guys, I guess to maybe talk a bit more about kind of the iOS roadmap.
How the acquisitions fitting into that and relative to what you were doing organically and then how you think about that relative to kind of what's going on in the market with <unk> and how that either positive or negative for you and if you even want to talk about kind of.
Ultimate removal of cookies, and how that ended up kind of playing out for you and then secondly.
Thank you.
How do you think about just the tail winds around video.
Further business, so meaning like obviously, we know a massive shift to video from a consumer standpoint, how does that impact.
One of your clients and how they spend on you in thinking about your product.
Thank you Jason good to hear from you. So I will try to answer all of the questions I think regarding your first question around <unk>.
<unk> strategy and as you can see we are being serious here and doing our first acquisition and this will drive the entire.
Mobile strategy, Android and iOS and you've got to go all in and we will accelerate the roadmap, though so a lot of the improvement will come in the next few months.
You will probably see and I'm sure you would like them.
The second question about the idea of say and how it impacts our market.
How are we seeing it so the absa and all the trend of removing cookies on the web and they're moving diagnose say on the mobile is.
Is here basically two.
Make the life of the network hubs to track you will then we target them online.
And this motion.
Not impacting our industry.
Doing more visual lamps statistic market research about the increments. So we don't use cookies IBSA when we're building.
Our measurement.
And what my my thinking around that that's what's going to happen once those things will remove.
The advertise though.
It is much more than it will be much more harder for them to measure them.
And I understand the ROI on their marketing.
What's caused to.
The digital worlds, maybe to feel like more like in TV NPV of more extreme situations when they when the advertiser doesn't know anything in this ecosystem they need to be 100% dependent on market research company to drive marketing strategy.
So my believe that once all of these trends of IBSA and remove a copy would go all in.
Our our industry it wouldn't have an amazing flourish in a nice way.
Because and then advertisers in the digital world, we need to be much more dependent on companies like US who gives you a market ducting.
And then the last question about video.
We do have in video intelligence offering.
Our platform that can enable.
Our customer to see what is the video advertising strategy there are competitors.
So we are touching it lightly, but we don't do video measurement and so we do support the marketing acquisition thing on the video strategy, but not not getting into the video measurement ecosystem.
Thank you.
Yeah.
Okay. Our next question comes.
Tyler Radke. Please state your question.
Hey, good afternoon or and Jason.
I wanted to ask you just around the strength that you saw in large deals I think you talked about a $6 $5 million.
Our deal.
What are you learning from some of these larger contracts just from a.
Closing and go to market perspective.
Just how are you thinking about the large deal pipeline as you head into Q4.
Thanks, Jason.
So yes, we're really excited about those.
Those large deals that when we talk about our land and expand strategy, that's really what we do we.
Our goal is too.
Land with the customer at the right at the right price point for them and.
Overtime, upsell and cross sell them and Thats, what you saw booked last quarter this quarter and youre seeing that in the <unk>.
Increase of those $100000 customers.
We're seeing more and more of those.
Because of the feedback.
We're seeing more and more of those in our pipeline that in other words.
The the existing customers that we have who are expanding.
Both in terms of usage in different departments and expanding in terms of more and more.
Solutions that they're doing with us and we think that this trend is going to continue.
Great.
Wanted to ask you about the the OEM.
Arrangement that you signed with Google I think their market by under service.
How does the revenue sharing going to work on that deal in.
Yeah.
Are you seeing any.
Any color you can provide on just kind of early traction in and kind of what.
Would the sizes.
Potential end users using that service.
So.
It wasn't a revenue sharing model basically.
Pay on the consumption so <unk>.
Buying extra store at that time, and they can build product that they give this product for free so they've been selling it.
So.
How it is work and we think that Theres a lot of opportunity in this entire OEM ecosystem. There is endless amount of company that's building product that Ken.
<unk> gained great value by using similar with Doctor.
In their workflows offering.
So we're seeing really great potential in <unk> and <unk> product and they are choosing a that's what was a very exciting moment for us.
Got it so Google is licensing the technology from you.
But the end users arent arent paying is that right.
Yes, Mark it's fine it's a three product by Google that helps.
These advertisers to find more market opportunity to expand them going into those markets. So they gave these products for free in order to drive more.
Then from the advertisement.
Got it thank you.
Okay. Our next question comes from.
Ryan Macwilliams. Please state your question.
Thanks for taking the question I'm happy to hear about the strength across the business. So let me just share some more on your shopper intelligence product you mentioned already winning a large deal since the product launch how do you think about the addressable opportunity for this product and how can the solution drive larger deal sizes.
Yes so.
First of all I my personal belief that the Tam for the shopper intelligence is massive because this product is telling you what people are buying online and as you compare to the more similar seen all of that is the old traditional marketplace.
What people are buying offline and the point of sale. This is a huge market of I don't know double digit billion dollar in the offline World and then there's more and more companies moving.
Depending more on selling online and more consumer spin.
Spending online and making their production.
And the access to this data become much more critical.
So the budgets will move to this model will be message and I think our offering and position. There is very very only call. It youll see bill and the quality of the data.
So I think that.
Tam is massive.
And I want to say any specific number.
Those are behind us, but you can see the deals you know the average deal in the short term intelligence Seeger.
And you can see after only three months.
Releasing this product out to be able to close the <unk> deal. It's I think it's insane as I said in the opening.
Call It took us fully yield too.
In the in the resale submission of the marketing solution to get to a point that we can close a seven figure deal and with this product.
After three months just showed the quality and then.
Demand in the market for this very unique and then data and insights.
I appreciate the color it seems like a logical upsell for some of our transactional customers Jason one for you.
All of the questions have been on the net retention doing very well in the quarter.
Should we consider this a new level for net retention as we try to model your growth out or anything maybe to call out here year over year or what went into this metric.
Okay.
Yeah.
I think so I think that we've gotten to this new level and I think that's a trend going forward.
Okay.
Okay. Our next question comes from.
Pat Walraven. Please state your question.
Hi, This is Joe Goodwin on for Pat. Thank you. So much for taking my question can you. Please talk about the advisory services that you offer to your larger customers and just maybe how that's going and how large that is from an IRR perspective today.
Yes, so sure so advisory services is something that when.
We introduced this new and very exciting motion basically it's an add on usually on most of on top of the customer that buying our software.
And basically in other of our customers when they start playing in building though.
The market share, although dashboards with our downtown a lot of the time they wanted to get more deeply granular dumped on specific strategic questions. They want to know about the digital world you cannot scare of ounce from the platform because we didn't know at least those specific data sets out there. So they usually they come to buy with services and move basically been.
For them custom data feed or specific.
<unk>.
And reports and the interesting thing about the advisory services that we saw I think different correct me, if I'm wrong here, but the 80% of the builder a recurring because they love the depth on the inside they are getting in dialysis scribing into those insights.
And <unk>.
Are we.
Talking about both sides of the advisors.
Yes.
I would say that.
I would say that.
In a few.
A few million dollars, but like I said I think it is even higher it's substantially all of them are recurring revenue there by design.
Well, Mike our other contracts.
Our base, but there provide that additional insight for things that have not yet been product types in the platform.
Yes.
To answer that.
Something nice to know that that was something that also is very strategic because usually when and when we werent due to our biggest account and those dots on reports we produce go all the way to the 11 since also.
Creasing relationship with the C level executive employing a lot of strategic question. So it's really been a huge success this year and we are.
We're expecting this also into nice growth for next year.
Great. Thanks for that color and then and then just on you guys made any pricing changes to your solutions understood. There is kind of different pricing.
<unk> across use cases and solutions, but is there any sort of pricing changes that you made that might be leading to some of this expanding user products that you've seen.
No not much.
That's not something that they think of it in the.
Any drastic change maybe more crystallized, but I don't think we need any significant change in pricing.
Got it thank you.
At this time there are no further questions at.
This concludes.
Third quarter earnings call. Thank you for your participation you may disconnect. Your lines at this time and have a great day.
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